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Spot Gold Near Record Highs as Fed’s First Cut in Nine Months Comes Into Focus

The yellow precious metal hovered near record highs on Monday after a fourth straight weekly gain, with prices up nearly 40% this year as Fed cut bets grow.

Markets are pricing over a 90% chance of a 25 bp move this week, marking the Fed’s first rate cut in nine months and setting the stage for an easing cycle.

The FOMC meets Tuesday and Wednesday, with Powell expected to deliver the cut and outline the Fed’s stance amid sticky inflation and a weakening labour market.

While the cut itself is priced in, the real driver will be Powell’s message on future easing, with markets watching for signals on potential cuts in October and December.

While easing is usually supportive, concerns over stagflation and markets racing ahead of the Fed’s outlook could spark volatility.

Technically, RSI is overbought and buckled, while the MACD remains in strong positive territory, and ADX flags a firm trend but over hearting.

As the recent break above $3,600 holds, the upside target looks to $3,700 zone, though caution is warranted given stretched, overbought conditions.

Daily Chart Spot Gold

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